Ken Clarke forgoes the biggest perk

Kenneth Clarke, the Justice Minister has agreed to forego the £2.3m grace and favour pension that comes with his title of Lord Chancellor.

Clarke’s office has issued a statement saying he will waive the additional benefits of the Lord Chancellor’s pension which entitle him to an index-linked £106,868 a year for life after a single day’s service. He will now take only those benefits in the Parliamentary scheme.

The role of Lord Chancellor is one of three positions in government that entitle the holder to a grace and favour pension of half of ministerial salary for life, regardless of length of service.

The other two posts offering pension accrued after a single day’s service pension are Prime Minister and Speaker of the House. While David Cameron has confirmed that he will forgo the grace and favour element of his pension, Speaker John Bercow has so far refused to do so.

Former Prime Minister Gordon Brown and former Lord Chancellor Jack Straw both opted to forgo their grace and favour pensions, although former Speaker Michael Martin did not.

Clarke is entitled to the full £106,868 a year for life, even if he leaves the post of Lord Chancellor tomorrow. It would cost the 70-year old Clarke around £2.3m to buy an annuity paying an equivalent income from an insurance company, according to Burrows and Cummins, the retirement income company.